I construct a structural model in which firms maximize value conditional on being restricted from issuing equity and unsecured debt. Using GMM estimation, I find that a model with both equity and debt constraints fits better than models without constraints or with only one constraint. The...

We examine whether internal funds matter for investment when the measurement error in q is addressed. By carefully employing methodologies that tackle the measurement error in q, we show that cash flow is a significant determinant of investment. We also find that an analyst forecast based q...

I study the target leverage and partial adjustment activity of firms that issue convertible bonds. Convertibles may help target adjustment efforts by lowering issuance transaction costs and reducing interest expenses. Nevertheless, convertible debt can increase liabilities for an unknown amount...

We find the investment-cash-flow-sensitivity (ICFS) decreases with a firm's asymmetric informational imperfection about growth (AI), a variable highly persistent over time. Firms with distinctly initial AI have distinct future investment styles and financing patterns. Higher initial AI predicts...

This study explores the impact of investment characteristics, mainly investment location relative to the firm's primary market, on financing choices by real estate investment trusts (REITs). Using a large sample of commercial property acquisitions, we show that REITs are 4-8% less likely to use...

We study the impact of financial constraints on cross-market arbitrage. We find that financially constrained firms are more likely to conduct debt-financed share repurchases. Such repurchases tend to reduce investments and increase financial distress risks, especially when financially...

We find credit line drawdowns are an important source of long-term finance for capital expenditures and acquisitions for all but the highest rated firms. Unrated and to a lesser extent intermediate-rated firms draw down credit lines most frequently when capital market conditions are unfavorable....

Firms in transition economies often suffer financial constraints. In Initial Public Offerings (IPOs), however, many newly listed Chinese firms raise funds in excess of what is originally planned. This paper examines whether the excess IPO funds are wasted on value-destroying spending or enable...

We empirically evaluate 20 prominent contributions to a broad range of areas in the empirical corporate finance literature. We assemble the necessary data and apply a single, simple econometric method, the connected-groups approach of Abowd, Karmarz, and Margolis (1999), to appraise the extent...

We study when and why firms exercise real options. Using detailed project-level investment data, we find that the likelihood that a firm exercises a real option is strongly related to peer exercise behavior. Peer exercise decisions are as important in explaining exercise behavior as variables...